4 comments:

Somalia should really be seen as an empirical failure of Austrian economics. Here you had 19 years of free markets and the country still has 60 percent unemployment in the cities and 40 percent unemployment in rural areas. Take a look at the articles of Somalia at the LvMI. They're hilarious. I've never seen so much praise for Somalia. What's especially amusing is their constant reference to how phone plans in Somalia are the cheapest in Africa. It's very reminiscent of Republicans during the worst parts of the Iraq war and their praise about how for the first time Iraqis had phones so everything was going great.

Also, the reemergence of the state in "anarcho"-capitalist Somalia was carried out by business associations that lobbied internationally for the state to return. Ironically, it was the capitalist that took down "anarcho"-capitalism. The reason is simple, capitalist receive major benefits from the state and so they have every incentive to have one - albeit a small one.

See, "Mogadishu: An Economy without a State" by Christian Webersik in the Third World Quarterly.

There's nothing ironic at all about the fact that Somali businesses *want* the state! Businesses ultimately need a "disinterested" police and court system to enforce private-property rights and contracts. Businesses also love all sorts of interventionism: historically, tariffs and official monopolies; currently, subsidies, free roads, intellectual-property protections, and other barriers to competition.